- Most recent CPI suggests core PCE might also show reduction
- Really focused on core inflation
- Starting to see the wage series step down but it will take time
- Core services and housing remain strong, will take until next year to filter into the headline
- Appropriate 'soon' to move to a slower pace of increases
- Fed has done a lot but more to do
- By moving at a more deliberate pace, the Fed can assess more data and better adjust the path of rates
- Question of peak rate will be informed by the flow of data, even for the Dec meeting, information will come in
- Doesn't say whether her own estimate of the peak Fed funds rate has changed
- Real incomes have fallen in aggregate during high inflation
- Treasury yield curve is now above 1% in real terms
Key line: "I think it will probably be appropriate, soon, to move to a slower pace of increases. But I think what's really important to emphasize is we’ve done a lot, but we have additional work to do...By moving forward at a pace that’s more deliberate, we’ll be able to assess more data and be better able to adjust the path of rates to bring inflation down."
The comments aren't any kind of surprise but there might have been market participants looking for a stronger Fed push-back against equity market gains. Instead, Brainard is sticking with her somewhat-dovish talking points.
The US dollar has softened on these comments while equities have bounced.